UPDATE 2-Brazil bank lending rises, default remains stable in March

BRASILIA, April 24 (Reuters) - Growth in outstanding loans
in Brazil's banking system rose 1.2 percent in March from the
previous month, the central bank said in a report on Friday.

The 90-day default ratio, the most widely followed gauge of
loan delinquencies, came to 4.4 percent last month, unchanged
from February, the bank said.

A contracting economy is pushing private-sector banks to
boost already high levels of credit-loss provisions to deal with
rising corporate defaults.

Moody's Investors Service warned on Thursday of a
deterioration in Brazilian banks' assets quality as the economy
continues to underperform. The rating agency stressed higher
risk for medium-sized banks and state-run lenders.

The downturn and an investigation into a multibillion-dollar
corruption scheme at state oil company Petrobras is
tightening credit in Latin America's biggest economy.

The central bank on Friday reduced its forecast for credit
stock in Brazil to represent 57 percent of the gross domestic
product this year from a previous estimate of 61 percent.

The rise in lending in March was due to a recovery in demand
for corporate credit, which the central bank said is common
during that period of the year.
(Reporting by Marcela Ayres; Editing by Chizu Nomiyama and Ted
Botha)